Dollar(DG) - 2025 Q3 - Quarterly Report

Part I Financial Statements This section presents Dollar General Corporation's unaudited condensed consolidated financial statements for the quarterly period ended November 1, 2024, along with accompanying notes Condensed Consolidated Balance Sheets This section provides a snapshot of the company's financial position, detailing assets, liabilities, and shareholders' equity as of November 1, 2024 Balance Sheet Highlights (as of Nov 1, 2024 vs. Feb 2, 2024) | Metric | Nov 1, 2024 (in thousands) | Feb 2, 2024 (in thousands) | | :--- | :--- | :--- | | Total Current Assets | $8,176,516 | $8,010,724 | | Total Assets | $31,460,415 | $30,795,591 | | Total Current Liabilities | $7,110,697 | $6,725,701 | | Total Liabilities | $24,117,830 | $24,046,472 | | Total Shareholders' Equity | $7,342,585 | $6,749,119 | Condensed Consolidated Statements of Income This section outlines the company's financial performance over specific periods, detailing revenues, expenses, and net income Income Statement Summary (Unaudited, in thousands, except per share amounts) | Metric | 13 Weeks Ended Nov 1, 2024 | 13 Weeks Ended Nov 3, 2023 | 39 Weeks Ended Nov 1, 2024 | 39 Weeks Ended Nov 3, 2023 | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $10,183,428 | $9,694,082 | $30,307,810 | $28,833,095 | | Gross Profit | $2,936,300 | $2,812,528 | $8,987,928 | $8,812,688 | | Operating Profit | $323,802 | $433,474 | $1,419,868 | $1,866,646 | | Net Income | $196,529 | $276,246 | $934,036 | $1,259,461 | | Diluted EPS | $0.89 | $1.26 | $4.24 | $5.73 | Condensed Consolidated Statements of Cash Flows This section details the inflows and outflows of cash from operating, investing, and financing activities for the specified periods Cash Flow Summary (For the 39 weeks ended, in thousands) | Cash Flow Activity | Nov 1, 2024 | Nov 3, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $2,195,163 | $1,442,019 | | Net cash used in investing activities | ($1,034,970) | ($1,235,544) | | Net cash used in financing activities | ($1,160,219) | ($222,604) | | Net (decrease) in cash | ($26) | ($16,129) | Notes to Condensed Consolidated Financial Statements This section provides additional details and explanations for the figures presented in the condensed consolidated financial statements - The company faces putative shareholder class action lawsuits alleging federal securities law violations related to misrepresentation of store labor, inventory, and pricing practices on financial results[68] Net Sales by Product Category (39 Weeks Ended) | Product Category | Nov 1, 2024 (in thousands) | Nov 3, 2023 (in thousands) | | :--- | :--- | :--- | | Consumables | $25,053,726 | $23,445,031 | | Seasonal | $2,958,509 | $2,979,474 | | Home products | $1,481,369 | $1,582,305 | | Apparel | $814,206 | $826,285 | | Total Net Sales | $30,307,810 | $28,833,095 | - The company did not repurchase any shares of its common stock during the 39-week periods ended November 1, 2024, and November 3, 2023[77] - A quarterly cash dividend of $0.59 per share was declared in December 2024, payable in January 2025, consistent with payments for the first three quarters of 2024[78] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial performance for the third quarter and first 39 weeks of fiscal 2024, covering operational results, strategic initiatives, and liquidity, highlighting key drivers and challenges Executive Overview This section provides a high-level summary of the company's business, strategic priorities, and key factors impacting its financial outlook - Dollar General operates 20,523 stores as of November 1, 2024, positioning it as the largest U.S. discount retailer by store count, serving value-conscious customers[85][86] - Core operating priorities include driving profitable sales growth, capturing growth opportunities, enhancing its low-cost operator position, and investing in its teams[88] - Significant inventory shrink and damages are anticipated to materially pressure full-year fiscal 2024 financial results, despite mitigation efforts[92] Real Estate Project Plans | Fiscal Year | New Stores | Remodels | Relocations | | :--- | :--- | :--- | :--- | | 2024 | ~730 | ~1,620 | ~85 | | 2025 | ~575 (plus up to 15 in Mexico) | ~2,000 (full) + ~2,250 (partial) | ~45 | - The company incurred $32.7 million in incremental SG&A expenses in Q3 2024 due to southern U.S. hurricanes, with an anticipated additional negative impact of approximately $10 million in Q4 2024[105] Results of Operations This section analyzes the company's financial performance, including net sales, gross profit, and operating expenses, for the reported periods - Q3 2024 net sales increased 5.0% to $10.18 billion, driven by new stores and a 1.3% same-store sales increase, comprising a 1.1% rise in average transaction amount and 0.3% in customer traffic[111][121] - Q3 2024 gross profit rate decreased by 18 basis points to 28.8%, primarily due to increased markdowns, higher inventory damages, and a sales mix shift towards lower-margin consumables[112][122] - Q3 2024 SG&A as a percentage of sales increased by 111 basis points to 25.7%, mainly due to $32.7 million in hurricane-related costs, higher retail labor, and increased depreciation and amortization[113][123][124] - For the 39 weeks ended 2024, net sales grew 5.1%, driven by new stores and a 1.4% same-store sales increase, primarily from a 1.8% increase in customer traffic[127] Liquidity and Capital Resources This section assesses the company's ability to generate and manage cash, including its capital expenditures, debt, and share repurchase plans - Cash flow from operations for the 39-week period of 2024 was $2.195 billion, a 52.2% increase from 2023, driven by improved inventory management and accounts payable timing[115][140] - Capital expenditures for fiscal 2024 are projected to be between $1.3 billion and $1.4 billion, allocated for store growth, remodels, and supply chain initiatives[144] - No share repurchases occurred in the first three quarters of 2024, nor are they planned for Q4, to preserve the investment-grade credit rating and financial flexibility, with approximately $1.38 billion remaining authorization[146] Credit Ratings | Rating Agency | Senior Unsecured Debt Rating | Commercial Paper Rating | Outlook | | :--- | :--- | :--- | :--- | | Moody's | Baa2 | P-2 | Negative outlook | | Standard & Poor's | BBB | A-2 | Negative outlook | Quantitative and Qualitative Disclosures About Market Risk This section reports no material changes to the company's market risk disclosures since its Annual Report on Form 10-K for the fiscal year ended February 2, 2024 - No material changes have occurred in market risk disclosures compared to the Annual Report on Form 10-K for the fiscal year ended February 2, 2024[147] Controls and Procedures Management concluded the company's disclosure controls and procedures were effective as of November 1, 2024, with no material changes to internal control over financial reporting during the quarter - The principal executive and financial officers concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[149] - No material changes occurred in the company's internal control over financial reporting during the quarter ended November 1, 2024[150] Part II Other Information Legal Proceedings This section incorporates by reference information on legal proceedings from Note 7 of the condensed consolidated financial statements in Part I, Item 1 - Information on legal proceedings is incorporated by reference from Note 7 of the unaudited condensed consolidated financial statements[153] Risk Factors The company reports no material changes to risk factors from its Annual Report on Form 10-K, except as discussed in the MD&A section of this Form 10-Q - No material changes to risk factors have occurred from the Annual Report on Form 10-K, except as discussed in the MD&A's 'Executive Overview'[154] Other Information This section discloses that no directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the fiscal quarter ended November 1, 2024 - No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the fiscal quarter ended November 1, 2024[155] Exhibits This section refers to the Exhibit Index, which lists all documents filed as exhibits with this Form 10-Q - A list of all exhibits filed with this quarterly report is provided in the Exhibit Index[156][158]